The Acceleration of the End of the Conservative Consensus

I have written in this space before about the Conservative Consensus.  In summary the Consensus is

• The uncritical belief in free trade.
• The uncritical belief in trickle down economics (Although that might just be an excuse for greed)
• Government regulation is a bad thing.
• Taxes are too high and need to be reduced.
• Government spending is too high and needs to be reduced.
• Social programs are ineffective and reduce economic activity.
• Deficit financing is bad and should be eliminated.  (This one is mainly given lip service.)
• Unions and organized labour is too powerful leading to a reduction in competitiveness and economic activity.  That power has to be curtailed.

That Consensus has been with us since the early 1980s and all governments of all political stripes have been constrained by it since then.

That Consensus has been slowly breaking down as demonstrated by the rise of Bernie Sanders and a whole host of US politicians who emulate him and who have been elected.  As well, the election of Justin Trudeau in 2015 even though he promised to run deficits AND introduce a new tax, followed by his re-election despite his keeping those promises and actually doubling down on them in 2019 are an indication of the breakdown in the Consensus.

Conservatives know that the Consensus is breaking down and they have been trying to slow it down if not reverse it.  The unrelenting opposition to the Carbon Tax by Conservatives surprised many commentators because they rightly point out that is was a conservative idea.  However, that was not the point.  The fact it was a new tax that had been accepted by Canadians frightened the shit out of Conservatives and they needed to convince them that is was a bad idea because if they accepted one tax they would accept more.  

Now the COVID pandemic has created the situation where the breakdown of the Consensus could be accelerated.  The Government of Canada did something very surprising when the virus really hit essentially forcing the shut down of the Canadian economy.  The government provided economic relief directly to Canadians instead of to business (particularly big business).  In addition, in order to pay for it they ran up a massive budget deficit.  Many have stated that if this would have happened under a Conservative government things would have been much different.  I would suggest that if this would have happened under the Chretien Liberals it would have been the same as under the Conservatives.  This is not because the Chretien Liberals were more Conservative it is because when Jean Chretien ran the show the Conservative Consensus was firmly entrenched and it had not yet been shown to be the disaster that it has proven to be.  

Ordinary Canadians appreciated the government assistance and they ignored some of the voices of the Consensus who indicated that the assistance was not good, some rambling on about the disincentive to work caused by it.  As well, that massive deficit was greeted with a collective shrug by Canadians.  

Now we are looking towards an economic recovery from COVID and the Trudeau government has indicated that Canada has been presented with an opportunity to address many of the issues that have resulted from living under 30+ years of the Consensus.  He did not state it that way but that is the upshot of what he is proposing.  Predictably many of the proponents of the Consensus have begun to urge caution.  There have been opinion pieces in the Globe, Financial Post and other media warning that Canadians may grow "used to" the government largess and that it will result in Canadians growing fat and lazy.  (I am paraphrasing)

The thing is, Mr. Trudeau would not have made such statements if he believed that it would hurt him politically.  The past few months have demonstrated to many Canadians that the government can directly help their citizens and it has also demonstrated that deficits are not the big bogey man we have been lead to believe.  It would appear Canadians are ready to move in a new direction and they are ready to do it sooner rather than later.

I firmly believe that Canadians would have come around to the change of direction anyway but it would have been much more gradual.  The pandemic might have accelerated the process.  Those who support and benefit from the Conservative Consensus will try to change their minds in the coming weeks and months but it is an open question of whether they will be able to.